Correlation Between Emetals and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Emetals and Perseus Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Emetals and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emetals and Perseus Mining, you can compare the effects of market volatilities on Emetals and Perseus Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Emetals with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emetals and Perseus Mining.
Diversification Opportunities for Emetals and Perseus Mining
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emetals and Perseus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Emetals and Perseus Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining and Emetals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Emetals are associated (or correlated) with Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Emetals i.e., Emetals and Perseus Mining go up and down completely randomly.
Pair Corralation between Emetals and Perseus Mining
Assuming the 90 days trading horizon Emetals is expected to under-perform the Perseus Mining. In addition to that, Emetals is 2.56 times more volatile than Perseus Mining. It trades about 0.0 of its total potential returns per unit of risk. Perseus Mining is currently generating about 0.02 per unit of volatility. If you would invest 224.00 in Perseus Mining on October 11, 2024 and sell it today you would earn a total of 37.00 from holding Perseus Mining or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.58% |
| Values | Daily Returns |
Emetals vs. Perseus Mining
Performance |
| Timeline |
| Emetals |
| Perseus Mining |
Emetals and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emetals and Perseus Mining
The main advantage of trading using opposite Emetals and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emetals position performs unexpectedly, Perseus Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Emetals vs. Perseus Mining | Emetals vs. Globe Metals Mining | Emetals vs. Balkan Mining and | Emetals vs. Hutchison Telecommunications |
| Perseus Mining vs. Bluescope Steel | Perseus Mining vs. Dexus Convenience Retail | Perseus Mining vs. Super Retail Group | Perseus Mining vs. Computershare |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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